Goldman Sachs is reportedly pausing new applications for its digital bank’s online savings account, from Wednesday, after a surge in deposits pushed it close to regulatory limits during the pandemic.
Executives at the bank are taking steps to manage the growth of the British arm of Marcus, according to Reuters.
Marcus has attracted around £21bn from more than 500,000 savers since its launch two years ago. But banking rules in the UK demand “ring-fencing” of retail deposits totalling more than £25bn.
“We’ve really seen our growth accelerate under lockdown as people hold off on discretionary spending and take time to reorganize their finances and get the best deal for their money,” Des McDaid, head of Marcus UK, told Reuters.
Because of the ring-fencing rules, Marcus would be forced to become a separate legal entity in the UK and it would limit how much capital it could share with the rest of Goldman’s businesses.
“Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model which allows us to pay consistently competitive rates to existing savers,” McDaid added.
Goldman Sachs said it is temporarily not accepting applications for our Online Savings Account, as of tomorrow. Existing customers are unaffected by the change, and new and existing customers can continue to open Marcus’ one year fixed rate saver.
The Sunday Telegraph reported last December that Goldman executives were set to take their foot off the gas to prevent Marcus from crossing the threshold, but the onset of the pandemic seems to have pushed it to the limit.
Marcus remains open for new accounts in the US where as of the first quarter, total deposits grew $8bn to $50bn.
McDaid said: “We are temporarily not accepting new applications for our Marcus online savings account in order to manage our rate of deposit growth. This step will allow us to continue providing great value to our existing customers. We remain committed to expanding our UK retail business in future.”